Ballmer says Windows Phone key to Microsoft's 'powerful' transformation

Also hails Windows 8, Xbox One, Surface 2 and Office 365

Steve Ballmer

Microsoft CEO Steve Ballmer has used his last letter to shareholders to provide a glimpse into how the company is making its transition from a "software and services" to a "devices and services" company.

Ballmer described Microsoft's acquisition of Nokia's Devices and Services business as a "signature event" in the company's transformation, and that it will "accelerate our growth with Windows Phone while strengthening our overall device ecosystem and our opportunity".

Other products and services given a nod include Windows 8.1, Surface 2, Xbox One and enterprise services such as Windows Server, Azure, Dynamics and Office 365, which Microsoft's larger-than-life CEO cited as further causes for optimism.

Structural change

Though the process is in "early days", Ballmer writes that the transformation is centred around structural changes to the organisation, which are based around a "deceptively simple but profoundly powerful key change".

He writes: "Instead of organizing our teams around individual products, we've organised by function, including, for example, engineering, sales, marketing and finance. It ensures we have one strategy and work as one team with one set of shared goals."

A recent SEC filing revealed that Ballmer's bonus was shrunk 11% during the company's 2013 fiscal year in light of a poor performance from its Windows Division. Unsurprisingly, Ballmer focused on the positive in his letter, pointing out that Microsoft grew revenue 6% over that period and returned 15% to shareholders (of which he is one of) through dividends and stock repurchases.